Union Budget: Ministry of Road Transport and Highways set to receive 6-8% budget hike in 2025

The Ministry of Road Transport and Highways (MoRTH) is poised for a 6-8% increase in its budgetary allocation for the upcoming financial year 2025, sources have told Business Today. 

This development aligns with the government’s continued focus on infrastructure development, a key priority under Prime Minister Narendra Modi’s administration, the source added.

For the financial year 2024-25, MoRTH was allocated a budget of Rs 2.72 lakh crore. By December 2024, the ministry’s actual expenditure stood at an estimated Rs 1.75-1.8 lakh crore. However, project awarding has slowed during the same period, with only 2,500 kilometers awarded compared to 3,100 kilometers in the previous year.

The Gross Budgetary Support (GBS) for MoRTH is now expected to grow modestly by 5-6%, reaching Rs 2.85-2.9 lakh crore for 2025. This increase reflects the government’s intent to boost road infrastructure to sustain economic growth and improve connectivity nationwide. Finance Minister Nirmala Sitharaman allocated Rs 11,11,111 crore for infrastructure development in the financial year 2024-25.

Renewed Push for BOT Projects and Bharatmala Pariyojana

As part of the upcoming budgetary plan, the government is likely to renew its emphasis on Build-Operate-Transfer (BOT) projects. According to sources, 15 BOT projects valued at Rs 44,000 crore are in the pipeline. This marks a strategic shift towards reducing dependence on government funding and encouraging private sector participation in road infrastructure development.

In addition, the budget is expected to focus on reviving the ambitious Bharatmala Pariyojana. The initiative aims to complete the remaining 4,182 kilometers under Phase-I, which has faced delays due to cost overruns and administrative challenges. The revival of Bharatmala is seen as critical to achieving the government’s long-term infrastructure goals.

Addressing Financial Challenges

The National Highways Authority of India (NHAI), which plays a pivotal role in implementing MoRTH’s projects, is grappling with a debt burden of Rs 2.8 lakh crore, down from Rs3.2 lakh crore in April 2024.  To address this financial strain, the budget is expected to introduce measures encouraging asset monetisation. This approach would involve leveraging existing road assets to fund new developments and ease the financial burden on the NHAI.